Earlier this week, an article in the Wall Street Journal caught my attention. It had to do with compact fluorescent light bulbs, or CFLs, and California’s experience with the energy-saving light bulbs. According to the article, the energy savings from these oddly-shaped sources of illumination haven’t lived up to expectations. As I read on, I thought about my own experience, having recently replaced my first burned-out CFL.

Using about 75 percent of the energy used by an incandescent light bulb, CFLs are supposed to last up to ten times longer than the energy-guzzling incandescent bulb. In California, the useful life of a typical CFL was initially estimated at 9.4 years by one California utility. Based on actual experience, it has now lowered expectations to 6.3 years. 6.3 years! My CFL didn’t make it to year 3.

I considered calling-in an electrician to check out my home’s circuitry and wiring, but before I did, I checked with Vickie here at AIC and she said she recently had a CFL go dead and was surprised at its “premature” demise (it lasted about 4 years). I’m glad I checked with her first. Comparing notes, my CFL was on for longer periods of time and cycled on and off more frequently – hence the shorter life (in contrast, I’ve also got other CFLs that I installed earlier that continue to shine.) Although my bulb’s short life was a surprise to me, I felt good that it did save on my energy bill when it was on.

Arizona utility companies, like those in California, are engaged in efforts to lower the demand for electricity. Lowering demand has the benefit of forestalling the need to build new power plants. For consumers who take advantage of energy efficiency programs, they save money on utility bills. CFLs are an important tool in Arizona’s energy efficiency tool box just like they are in California. And, as the saying goes, “the cheapest kwh of electricity is the one that isn’t used.” This is why the California PUC and the Arizona Corporation Commission have directed these investor-owned power companies to implement demand-side energy reduction programs, like subsidizing the cost of CFLs. In return, the companies are authorized to pass the costs along to the general body of ratepayers. What California regulators are discovering in their evaluation of EE programs, however, is that the cost effectiveness of the companies’ CFL programs has fallen short of expectations. The reasons are:

- Not all the identifiable, subsidized CFLs have been installed by customers or sold by retailers (they could, however, lead to energy savings later)

- The unit energy savings were lower than expected due to shorter, actual life of the CFLs

- CFLs were sold to individuals who are not customers of the investor owned utility subsidizing the cost of the bulb

- The companies underestimated the number of “free riders” -- those who would otherwise pay the full price of the CFL without the subsidy

So, what’s my point.

Well, first -- California’s experience should be a cautionary tale for the ACC. The ACC’s EE target for regulated power companies is to achieve a reduction of demand by 22 percent in the next 10 years. At the time the rules were approved by the Commission, it was recognized by the Commission, the utility companies, and other stakeholders that this target was an aggressive one. For any utility, the ability to reach this aggressive target is dependent on how well consumers respond to EE incentives, and whether EE appliances, like CFLs can deliver the energy savings as billed.

Second, the ACC must be flexible in its approach to energy efficiency and should be willing to modify its requirements as it gains actual experience. Sometimes engineering estimates miss the mark. When you add human behavior to the equation, you might be in store for a real surprise.